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Beyond the volatility: is a near-term recession likely?

August has been a highly volatile period for the financial markets. Reignited trade tensions and recent yield-curve inversions have spooked investors, culminating in a 3% drop in the S&P 500 Index on Aug. 14, its worst day of the year. Ivy provides its perspective on these two market moving events.

Ivy Live/ 8.22.19

FAANG: In the government's crosshairs

The big four tech giants – Apple, Amazon, Facebook and Google – are facing antitrust investigations and scrutiny over data privacy. And surprisingly, the push is gaining bipartisan support. Is it just noise for the tech sector or a larger threat to investors?

Market Perspective/ 8.05.19

Fed cuts rates; where do we go from here?

The Fed announced a much-anticipated one-quarter-percentage-point cut to the federal funds rate. Following the decision, Fed Chairman Powell's press conference commentary was perceived as unexpectedly hawkish. While the market had a 'buy the rumor, sell the news’ reaction, but we believe underlying fundamentals should support continued growth during the rest of 2019.

Maximizing the Value of 529 Plans

Parents are preparing their kids to head back to school as the topic of affording college tuition looms large. Discover how you can help your clients with 529 plans.

Genlink

Attracting assets in motion

Over the next few decades, client assets currently held by Traditionalists and Baby Boomers will be controlled by Generation Xers and Millennials, reshaping the traditional financial advisor model. Discover how you can plan for each generation.

Genlink

Why advisors need to understand each generation

Navigating generational differences can be tricky, whether you’re speaking to a younger client or chatting with a long-time client that might be your parents’ age. Knowing each generation can lead to a growing and stable practice.

Ivy Investments

We stand for a legacy of expertise, focused on delivering strong, long-term results. Our name reflects our progressive product offerings and growing global presence as we continue to adapt to the needs of investors.

Quarterly Fund Commentary

Ivy Limited-Term Bond Fund

Market Sector Update

Yields across the U.S. Treasury curve fell substantially during the quarter. The yield on the 2-year U.S. Treasury note
fell 50 basis points (bps) to 1.76%, while the 5-year U.S. Treasury note fell 46 bps to 1.77% at the end of the quarter. The
front end of the yield curve is particularly flat and slightly inverted as the 3-year note ended the quarter at 1.71%.

The first half of the year saw the Federal Reserve (Fed) shift its strategy from rate hikes to “patience” in the first
quarter, then Chairman Jerome Powell pivoted toward rate cuts at the June Federal Open Market Committee (FOMC)
meeting. Uncertainty about the trade environment and tariffs and global growth were key concerns. President Donald
Trump raised the tariff rate from 10% to 25% on $200 billion imports from China in early May.

Portfolio Strategy

The Fund had a positive return, but slightly underperformed relative to its benchmark for the quarter.

The Fund is underweight U.S. Treasuries, overweight corporate bonds, and maintains an allocation to mortgagebacked
securities, primarily commercial mortgage-backed securities. During the quarter we reduced the Fund’s cash
position and added to all three of the asset classes.

The Fund's duration, which is a measure of the sensitivity of bond prices to changes in interest rates, is roughly 90%
of the benchmark.

Outlook

The current economic expansion is now the longest on record. It is clear the Fed wishes to keep promoting this
expansion. Inflation is in check – the Consumer Price Index, Producer Price Index and Personal Consumption
Expenditure Deflator all remain under 2%. The lack of inflation provides the Fed the room to cut rates should it be
deemed necessary.

Expectations are rising for a rate cut of at least 25 bps at the July FOMC meeting. The influx of data ahead of the
meeting could shift expectations. May’s employment report was weak with nonfarm payroll number posting a gain of
just 75,000 jobs. However, there will be another employment report and the first reading on second-quarter gross
domestic product before the next Fed meeting.

We believe fixed income should perform well for the foreseeable future. The Fed rate hikes are behind us and the
potential for cuts lies ahead, both of which should support performance. In dealing with slower growth in Europe, the
European Central Bank said it will do “whatever it takes” to help deliver positive growth to the economies of
Europe. While domestic interest rates are low, they are negative far out on the yield curve in Europe. For example, the
10-year German bund yielded -33 bps at the end of June.

Many market participants are debating the Fed’s reason for cutting rates. Some believe it is an insurance cut aimed
at helping to extend the expansion, while others think the cut is due to an impending economic recession. While we
know expansions do not last forever, our view is that a recession is unlikely in the near term.

The opinions expressed are those of the Fund’s managers and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions are current through June
30, 2019, are subject to change at any time based on market and other current conditions, and no forecasts can be guaranteed. This commentary is being provided as a general source of information and is not
intended as a recommendation to purchase, sell, or hold any specific security or to engage in any investment strategy. Investment decisions should always be made based on an investor’s specific objectives, financial
needs, risk tolerance and time horizon. Past performance is not a guarantee of future results.

All information is based on Class I shares.

Risk factors: The value of the Fund's shares will change, and you could lose money on your investment. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Fixed income securities are subject to interest rate risk and, as such, the net asset value of the Fund may fall as interest rate rise. These and other risks are
more fully described in the Fund's prospectus.

The financial products and services described in this website are offered only in the United States, Puerto Rico
and the U.S. Virgin Islands. Nothing in this website should be considered a solicitation to buy or an offer to sell such products
and services in any jurisdiction where the offer or solicitation would be unlawful under the laws of such jurisdiction.

IVY FUNDS® mutual funds and IVY VARIABLE INSURANCE PORTFOLIOS® are managed by Ivy Investment Management Company and are distributed by Ivy Distributors, Inc., InvestEd℠ Portfolios are managed by Ivy Investment Management Company and are distributed by Waddell & Reed, Inc. These financial products are offered by prospectus only. Waddell & Reed Financial, Inc. is the ultimate parent company of Ivy Distributors, Inc. and Waddell & Reed, Inc.

Before investing, investors should consider carefully the investment objectives, risks, charges and expenses of a mutual fund or portfolio.
This and other important information is contained in the prospectus and summary prospectus, which may be obtained here or from a financial advisor.
Read it carefully before investing.

IVY INVESTMENTS℠ refers to the investment management and investment advisory services offered by Ivy Investment Management Company, the financial services offered by Ivy Distributors, Inc., a FINRA member broker dealer and the distributor of IVY FUNDS® mutual funds and IVY VARIABLE INSURANCE PORTFOLIOS®, and the financial services offered by their affiliates.